Active Learning 1_JAydensAHAynes

Name: Jayden Haynes ECON 2000 Ch 4 Active Learning 1 Instructions for submission :  File name: Active Learning 1_FirstLastName e.g. Active Learning 1_HannaJohn  File extensions: .docx  File Upload: Upload your document here. Rubrics: For each scenario  Draw D 1 and a point A (1 point)  Show the movement/shift (1 point)  Explain the rationale (1 points) Hints: How to go about Active Learning 1: [ Do each scenario separately – so you will have 3 graphs and the explanation of the rationale – one for each scenario ] Template for graph: Explaining the rationale: Indicate whether the above scenario will result in a price or non-price change. [ Edit to keep only the relevant segments of the rationale pertaining to each scenario] o If Price change then indicate if movement is to the [right / left] OR o If Non-price then identify the non-price determinant that causes the shift.  Number of buyers  Price of related goods o Substitutes o Complements  Income o Normal good o Inferior good  Tastes  Expectations o If Non-price change then shift to the [right / left] o Compare the impact of the scenario to the initial P and Q. P O r a n g e J u i c e Q O r a n g e J u i c e

 Price [increased/decreased/no change]  Quantity [increased/decreased/ no change] Active Learning 1: The demand curve/side analysis Draw the demand curve for orange juice, D 1 , and a point A (which corresponds to P 1 , Q 1 ) on the demand curve. What happens in each of the following scenarios ? Why? A. The price of apple juice increases B. The price of orange juice falls C. Consumers’ income falls (and orange juice is a normal good) Your answer start here: A. The price of apple juice increases Graph: Rationale: The shift and then that curve towards the right is due to a nonprice determinate so the apple juice and orange juice are substitutes and the rise, and the price of apple juice will increase the demand for orange juice. This will cause the equilibrium quantity to increase the equilibrium price to increase. P O r a n g e J u i c e Q O r a n g e J u i c e

C. Consumers’ income falls (and orange juice is a normal good) Graph: Rationale: This is a non-price change in the determinate that causes the shift and the demand curve is the income. The demand curve shifts left as orange juice as a normal good in the income of the consumers is also reduced so they demand less this will cause a decrease and quantity demand and a decrease in the overall price. P O r a n g e J u i c e Q O r a n g e J u i c e